AngloGold in Bid for Ashanti Goldfields

AngloGold, made a $1.1 billion bid for Ghana-based Ashanti Goldfields. If the bid is accepted, AngloGold will become the world’s biggest gold miner. However getting there won’t be easy. Late Friday mining group Randgold Resources made a £901 million ($1.46 billion) merger proposal for the company.

Ashanti’s two key shareholders are the Ghanaian government with a 19.5 percent share and mining group Lonmin, which owns 32 percent of Ashanti.

Lonmin, headed by banker Sir John Craven, is expected to turn down Randgold’s offer, because it has a big share-swapping component, which will give Lonmin a reduced stake in the company. Sir John has indicated he will urge Randgold to come up with a cash offer.

Earlier it was reported that AngloGold’s offer, worth about $8.71 a share, has the approval of Ashanti’s board and Lonmin, but it is yet to get the thumbs up from the Ghanaian government.

It’s believed Randgold was encouraged by the Ghanaian Government to make the bid. Government officials said it will decide on the bids next month.

Mark Bristow, Randgold's CEO, made a trip to Ghana to try and convince Ashanti it to recommend its bid, saying, “We are working through all the necessary channels”.

AngloGold's finance director, Jonathan Best, on the other hand dismissed Randgold's bid, saying: “I doubt whether the market will see it as a superior offer”.

Ashanti’s Abuasi deep level mine is considered the miners central long-term asset and growth driver.